Obama proposes strategy for cyber-identity 'ecosystem'

The Obama administration on Friday unveiled its long-awaited strategy for creating an "identity ecosystem" that would improve the security of online transactions.

The goal of the National Strategy for Trusted Identities in Cyberspace is to create digital identity credentials that consumers could obtain from either a public or private provider. The credential would allow a user to log into any website. 

The administration claims participation in the identity ecosystem will be entirely voluntary and users can choose to remain anonymous online. But privacy and civil rights advocates are sure to be concerned over what could be viewed as an attempt to create a type of digital ID card.

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Several prominent Web firms and retailers have lined up to back the initiative, including Google, Verizon, Paypal and AT&T. The companies are likely drawn by the promise of allowing customers to pay their phone, utility and other bills from their mobile devices or the Web without having to remember a plethora of passwords.

“The Internet has transformed how we communicate and do business, opening up markets, and connecting our society as never before. But it has also led to new challenges, like online fraud and identity theft, that harm consumers and cost billions of dollars each year,” President Obama said in a statement announcing the initiative.

“By making online transactions more trustworthy and better protecting privacy, we will prevent costly crime, we will give businesses and consumers new confidence, and we will foster growth and untold innovation. That’s why this initiative is so important for our economy.”

The secure credential could be a piece of software on a mobile device, a smartcard or a small token that generates one-time passwords. The administration claims the ecosystem will be led by the private sector with the government helping to develop the technologies, standards and policies necessary.

“We must do more to help consumers protect themselves, and we must make it more convenient than remembering dozens of passwords,” Commerce Secretary Gary Locke said in an address at the U.S. Chamber of Commerce, according to his prepared remarks. 

“Working together, innovators, industry, consumer advocates and the government can develop standards so that the marketplace can provide more secure online credentials, while protecting privacy, for consumers who want them.”